A long-running patent suit between RF (radio frequency) technology company ParkerVision and Qualcomm has ended. Last week, a Florida jury found that Qualcomm infringed on ParkerVision patents. The company was seeking up to $432 million, which could have been tripled if willful infringement was found.

Yesterday the damages order came down. Qualcomm's infringement wasn't willful, and it will have to pay $173 million—if the judge doesn't lower it further. That's a lot of money, but it's much less than what investors at ParkerVision, a public company, were hoping for. This morning, shares of ParkerVision, which trades as PRKR on the Nasdaq index, have plunged 60 percent. That just about eliminates the bump it received last week when it won its case.

Investors in Qualcomm, which made $5.68 billion in the year ending 2012, didn't even blink. Qualcomm hasn't reported any of the ParkerVision litigation as material to its stock price.

"We are of course disappointed by the award of damages," said a Qualcomm spokesperson in a statement. "We are grateful for the jury's hard work throughout this trial and for the verdict of no willfulness. We will direct our efforts towards addressing the post-trial process and preparing our appeal."

Nine-digit verdicts don't happen every day. A $173 million windfall—especially when no other revenue sources seem forthcoming—would have most investors in a small company like ParkerVision jumping up and down. But that didn't happen. "Were Investors Set Up To Fail?" asked one writer on investment site SeekingAlpha. He quotes a JP Morgan Chase analyst telling clients that just a week ago, ParkerVision was in a position to win up to $2 billion.

To discover why a huge winner in court is actually the loser, one has to take a close look at ParkerVision's business and the nature of publicly traded patent companies.

Investor would need a huge win, not just a big win

ParkerVision was incorporated in Florida in 1989 to develop RF technology. It is not, and has never been, profitable. In the first half of 2013, it burned through $13.6 million and had no revenue. It also didn't have any revenue in 2012 or 2011. In 2010, the company made $64,000 from one service contract. During those years, it increased its staffing and compensation.

In its last annual filing, ParkerVision's accumulated deficit was reported to be $262.1 million—too big to be wiped out even by a big patent payday. To please investors with a patent win, ParkerVision would need an absolute blockbuster of a verdict. The biggest patent verdicts of all time have topped out at around $1 billion, and most of those have been appealed or lessened by post-trial rulings. (Apple's $1.05 billion verdict against Samsung would have been an all-time high if it had held up on appeal, but that figure has already been significantly lowered in post-trial action.)

ParkerVision hasn't been able to convince handset makers or chip makers to incorporate its technology into their handsets. The primary product, the "d2p" transmitter-power amplifier, never took off. In late 2011, four months after ParkerVision sued Qualcomm, a group of ParkerVision investors sued (PDF) their own company's management, arguing that the d2p technology "simply did not work."

The lawsuit also named ParkerVision CEO Robert Parker; Robert Sterne, director at the well-known patent law firm Sterne Kessler; and a director at ParkerVision. Sterne had told investors that he had signed on to help ParkerVision create a patent portfolio because he was "frankly intellectually blown away by their fundamental breakthroughs."

While the company's hopes seem bound up with its patents at this point, it doesn't fit any easy definition of "troll." ParkerVision's most recent annual filing notes that it has 47 full-time employees and spent more than $8 million annually on R&D in each of the last three years. It hasn't launched a barrage of lawsuits, having only sued Qualcomm.

Still, under financial pressures, ParkerVision did hire "intellectual property strategy firms" last year to see about making more companies pay up for its patents. "We believe opportunities exist in the mobile device industry, as well as numerous other industries, for intellectual property licensing, joint ventures, and/or other business relationships that could provide us with additional sources of revenue from our patented innovations and thus increase shareholder value," states the ParkerVision 10-K.

ParkerVision seems to be more evidence that the model of publicly traded patent-based companies rarely pays off for investors. The stocks often get hyped on trading sites like Seeking Alpha just before trial but ultimately disappoint as damages are whittled away, and the large defendant companies they're seeking a windfall from fight hard on appeal. Vringo's hoped-for windfall against Google was much smaller than it wanted. Even VirnetX, which won a big payday from Apple, had its stock price cramped down again after losing to Cisco at trial earlier this year.

It seems a little frustrating that a company that does not either either produce products or have other companies license their work, can still be a problem to a company that came to what was probably the simplest logical conclusions to an engineering problem.

Wow, how can you be in business for 24 years and never make a profit? I understand long term investments, but this would take the cake. Who in their right mind would still be pumping money into this after so many years, unless it's someone just looking for some sort of tax write-off?

Would buying every share of their stock at its current price be cheaper than the ordered payment?

Market cap is currently $286m, so not actually all that far off. If they have real technology there, they might be snapped up by someone soon to just fold it into their patent portfolio (since they actually "won" a case). I imagine it'll drop further, the company has sold an additional $30m in shares the past year or so which is keeping them cash positive right now, probably from people hoping to cash in on this big payday. Now they'll have a slush fund for a while (once they actually get paid) but they're pretty lacking in cash until then to actually do much.

Vringo had the same issue last year, they sued Google, won and got a relatively tiny payday. Prior to that they received a massive amount of investment, but it's all speculative and didn't pan out, odds are they'll slowly burn through the rest of their cash while hoping to find a new technology.

It seems a little frustrating that a company that does not either either produce products or have other companies license their work, can still be a problem to a company that came to what was probably the simplest logical conclusions to an engineering problem.

So you have to be a manufacturing company to have worthwhile ideas?

I don't find anything wrong with a company that specializes in R&D. These guys obviously do. The failure here is being able to convince companies to license their patents, not failure to manufacture products using them.

It seems a little frustrating that a company that does not either either produce products or have other companies license their work, can still be a problem to a company that came to what was probably the simplest logical conclusions to an engineering problem.

So you have to be a manufacturing company to have worthwhile ideas?

I don't find anything wrong with a company that specializes in R&D. These guys obviously do. The failure here is being able to convince companies to license their patents, not failure to manufacture products using them.

I clearly said produce or get others to license, of which they did neither for many years.

It seems a little frustrating that a company that does not either either produce products or have other companies license their work, can still be a problem to a company that came to what was probably the simplest logical conclusions to an engineering problem.

So you have to be a manufacturing company to have worthwhile ideas?

I don't find anything wrong with a company that specializes in R&D. These guys obviously do. The failure here is being able to convince companies to license their patents, not failure to manufacture products using them.

There's an Australian guy who patents anything he can (supposedly he got a patent for wireless printing). The problem is that someone comes up with an obvious idea and sits and waits for profit. How does this help society in any way? I'd say it doesn't.

Fascinating. In the broadcast industry ParkerVision is synonymous with disastrous newscast automation. They made an astoundingly buggy product that let stations cut production staff and run newscasts with one console controlling the switcher, graphics, video playback, cameras, and audio.

It was infamous for crashing and burning, leaving news anchors reading on-set with nothing to toss to. General managers loved it because it saved them money, even while it hurt their on-air product.

ParkerVision sold off the automation to Grass Valley Group, which had to rename the product to Ignite because ParkerVision had such a terrible reputation. (Ignite is now a much more mature product, which runs newscasts in some of the largest markets in the country.)

ParkerVision hasn't been able to convince handset makers or chip makers to incorporate its technology into their handsets. The primary product, the "d2p" transmitter-power amplifier, never took off.

Two thoughts here. First, one should always keep in mind, a legal monopoly (i.e. a patent) is not the equivalent of an economic monopoly. A patent-owner plaintiff is only going to get damages proportional to the harm caused by the infringement; which is likely why ParkerVision was pushing for willful infringement and treble damages. Second, it's important to not give Qualcomm a pass here, they are the heavyweight in their realm, and I would not find it at all unlikely that they looked at the ParkerVision technology, thought some of it might be useful, and then set off to develop a work-around the patents.

Also of random note, Sterne Kessler does not appear to be the law firm which litigated the case, but rather simply the patent firm which wrote and prosecuted the patents. This is often happens because the law firm and attorneys who wrote and prosecuted the patents can be deposed in litigation and subject to discovery requests. There is risk, therefore, of opposing counsel inadvertently/disingenuously/completely-unethically-and-intentionally getting litigation strategy and information when digging into the patent prosecution process. It is just safer to have separate patent prosecution counsel and patent litigation counsel.

It seems a little frustrating that a company that does not either either produce products or have other companies license their work, can still be a problem to a company that came to what was probably the simplest logical conclusions to an engineering problem.

A company that doesn't produce products (other than research) would be the definition of many if not most biotech startups. Their value is pretty much entirely encapsulated in the patent portfolio that protects their inventions resulting from their research.

Having a far larger company refuse to pay to license the IP is a very different thing from refusing to license it to anyone. While I haven't looked further than the article, I suspect it's safe to assume that we're dealing with the former rather than the latter.

It seems a little frustrating that a company that does not either either produce products or have other companies license their work, can still be a problem to a company that came to what was probably the simplest logical conclusions to an engineering problem.

The Ars article doesn't say anything about the contents of the patent. How did you conclude that this was for "the simplest logical conclusions to an engineering problem"?

ParkerVision hasn't been able to convince handset makers or chip makers to incorporate its technology into their handsets. The primary product, the "d2p" transmitter-power amplifier, never took off.

Two thoughts here. First, one should always keep in mind, a legal monopoly (i.e. a patent) is not the equivalent of an economic monopoly. A patent-owner plaintiff is only going to get damages proportional to the harm caused by the infringement; which is likely why ParkerVision was pushing for willful infringement and treble damages. Second, it's important to not give Qualcomm a pass here, they are the heavyweight in their realm, and I would not find it at all unlikely that they looked at the ParkerVision technology, thought some of it might be useful, and then set off to develop a work-around the patents.

Also of random note, Sterne Kessler does not appear to be the law firm which litigated the case, but rather simply the patent firm which wrote and prosecuted the patents. This is often happens because the law firm and attorneys who wrote and prosecuted the patents can be deposed in litigation and subject to discovery requests. There is risk, therefore, of opposing counsel inadvertently/disingenuously/completely-unethically-and-intentionally getting litigation strategy and information when digging into the patent prosecution process. It is just safer to have separate patent prosecution counsel and patent litigation counsel.

I'm a little confused. If Qualcomm did look at the patent and then chose to develop something that doesn't use what was patented, why shouldn't they be off the hook? They would not be using the patented technology. Are you saying that because they are the bigger company they should not be able to develop their own methods and instead should pay for a patent and use it just because a small company came up with one approach?

It seems a little frustrating that a company that does not either either produce products or have other companies license their work, can still be a problem to a company that came to what was probably the simplest logical conclusions to an engineering problem.

So you have to be a manufacturing company to have worthwhile ideas?

I don't find anything wrong with a company that specializes in R&D. These guys obviously do. The failure here is being able to convince companies to license their patents, not failure to manufacture products using them.

There's an Australian guy who patents anything he can (supposedly he got a patent for wireless printing). The problem is that someone comes up with an obvious idea and sits and waits for profit. How does this help society in any way? I'd say it doesn't.

That's a solid straw man right there! No one has said that this is a company that has patented something simple. Yes, that Australian patent troll deserves to have his patents revoked if they are so overly broad. On the other hand, this company has spent $6 million per year on R&D for a fairly long time; they're just an R&D company.

Evidence: They actually had a solution they've been trying to get Qualcomm to use. If you make a solution and someone just works around it, that's patent infringement of the type for which we have the existence of patents.

ParkerVision hasn't been able to convince handset makers or chip makers to incorporate its technology into their handsets. The primary product, the "d2p" transmitter-power amplifier, never took off.

Two thoughts here. First, one should always keep in mind, a legal monopoly (i.e. a patent) is not the equivalent of an economic monopoly. A patent-owner plaintiff is only going to get damages proportional to the harm caused by the infringement; which is likely why ParkerVision was pushing for willful infringement and treble damages. Second, it's important to not give Qualcomm a pass here, they are the heavyweight in their realm, and I would not find it at all unlikely that they looked at the ParkerVision technology, thought some of it might be useful, and then set off to develop a work-around the patents.

Also of random note, Sterne Kessler does not appear to be the law firm which litigated the case, but rather simply the patent firm which wrote and prosecuted the patents. This is often happens because the law firm and attorneys who wrote and prosecuted the patents can be deposed in litigation and subject to discovery requests. There is risk, therefore, of opposing counsel inadvertently/disingenuously/completely-unethically-and-intentionally getting litigation strategy and information when digging into the patent prosecution process. It is just safer to have separate patent prosecution counsel and patent litigation counsel.

I'm a little confused. If Qualcomm did look at the patent and then chose to develop something that doesn't use what was patented, why shouldn't they be off the hook? They would not be using the patented technology. Are you saying that because they are the bigger company they should not be able to develop their own methods and instead should pay for a patent and use it just because a small company came up with one approach?

If they did totally work around the patents, then fine, well done them. If on the other hand, they thought they worked around the patents but hadn't, then that's just wilful infringement.

Nope, no patent troll here. Just a badly managed company with a bad product that should be delisted for everyone's benefit, including their own. Public listing entails a lot of money and effort (especially after Sarbanes-Oxley came into effect) that seriously eats into the burn rate of non-revenue-generating companies like these.

I don't know why Qualcomm would want to buy a company that has so much debt, even if they only spent the 173 million. They'd own an unprofitable company and owe another 262.1 million dollars. Doesn't seem like a good investment.

It seems a little frustrating that a company that does not either either produce products or have other companies license their work, can still be a problem to a company that came to what was probably the simplest logical conclusions to an engineering problem.

So you have to be a manufacturing company to have worthwhile ideas?

I don't find anything wrong with a company that specializes in R&D. These guys obviously do. The failure here is being able to convince companies to license their patents, not failure to manufacture products using them.

There's an Australian guy who patents anything he can (supposedly he got a patent for wireless printing). The problem is that someone comes up with an obvious idea and sits and waits for profit. How does this help society in any way? I'd say it doesn't.

It's never as simple as some people think. Very often, an inventor comes up with something good, and useful, but has no financing to produce it themselves. They go around to companies hoping to license their work. But the way it works is that companies are very wary of working with someone not already in the industry.

So they have this good technology, but can't get anything done with it. Often they will sell it to a company that licenses patents out. We really can't say that this is a bad thing. It's possible that the patent does have value. Often companies do go to these patent holding companies and license patents from them. It's a valid business.

But we can often see situations where the patent holders aren't interested in a valid business. They would rather wait until a business is built up using patents they have, but are not known by others, and only sue when it looks like the patents have much more value. THAT's a patent troll.

But being someone who was a partner in a small company with 43 patents, patents that were mostly used n our own products, I feel it's difficult for me to accuse an inventor who decides to try to license his/her patents. Money isn't easy to come by, and many inventors never manage to afford to start their own business, manufacturing products. What should they do? They deserve to get paid if someone else uses their technology. I don't know why anyone would disagree with that.

Evidence: They actually had a solution they've been trying to get Qualcomm to use. If you make a solution and someone just works around it, that's patent infringement of the type for which we have the existence of patents.

If they did totally work around the patents, then fine, well done them. If on the other hand, they thought they worked around the patents but hadn't, then that's just wilful infringement.

I'm sorry, but this is just wrong.

You are allowed to work around a patent. Indeed, you are encouraged to work around a patent.

If a company thinks that it has worked around a patent then it is not willful infringement. Willful infringement is exactly what the phrase means.

Evidence: They actually had a solution they've been trying to get Qualcomm to use. If you make a solution and someone just works around it, that's patent infringement of the type for which we have the existence of patents.

If they did totally work around the patents, then fine, well done them. If on the other hand, they thought they worked around the patents but hadn't, then that's just wilful infringement.

I'm sorry, but this is just wrong.

You are allowed to work around a patent. Indeed, you are encouraged to work around a patent.

If a company thinks that it has worked around a patent then it is not willful infringement. Willful infringement is exactly what the phrase means.

You are also contradicting yourself in the two paragraphs.

Absolutely. The world is not split into a) successfully pulling off what you meant to do and b) intentionally doing the exact opposite.

262 million in debt?... thats some partying!... sad that this company with people who are thinking, had managment that ran the company poorly... the stress the management has can not help a company that is suppose to Innovate.

Quote:

ParkerVision sold off the automation to Grass Valley Group, which had to rename the product to Ignite because ParkerVision had such a terrible reputation. (Ignite is now a much more mature product, which runs newscasts in some of the largest markets in the country.)

TL;DR... when do the " rats start to flee the ship?"... and those that think parkervision is a great company... compare and contrast yourself to NORTEL...

Second, it's important to not give Qualcomm a pass here, they are the heavyweight in their realm, and I would not find it at all unlikely that they looked at the ParkerVision technology, thought some of it might be useful, and then set off to develop a work-around the patents.

There's nothing wrong with that. Patents are publicly disclosed. Anybody is free to learn from them and develop work-around products that accomplish the same thing a different way.

Second, it's important to not give Qualcomm a pass here, they are the heavyweight in their realm, and I would not find it at all unlikely that they looked at the ParkerVision technology, thought some of it might be useful, and then set off to develop a work-around the patents.

There's nothing wrong with that. Patents are publicly disclosed. Anybody is free to learn from them and develop work-around products that accomplish the same thing a different way.

Except in software patents where the patent to often describes the graphical on-screen end results and not how it was actually actually accomplished...

Second, it's important to not give Qualcomm a pass here, they are the heavyweight in their realm, and I would not find it at all unlikely that they looked at the ParkerVision technology, thought some of it might be useful, and then set off to develop a work-around the patents.

There's nothing wrong with that. Patents are publicly disclosed. Anybody is free to learn from them and develop work-around products that accomplish the same thing a different way.

Correct. To clarify, there is absolutely nothing wrong with trying to work-around a patent; that's entirely a part of the spurring innovation aspect of the patent system, forcing people to find a different way to accomplish the goal.

How successful one is at actually working around the patent is another question, and how broadly the patent covers the invention (i.e. does it cover all currently conceivable embodiments?), are the questions to ask of the work-around. In this case, (if Q was in fact working-around the PV patents), the jury decided the changes weren't enough, but also weren't willfully trying to copy what the patents claim.

My feeling of not giving Q a free pass is just based on suspicion / standard practice of big companies muscling out small companies, extending and implementing the small company idea with the infrastructure of the large company. In such cases, patents are exactly what small companies rely on to protect the application of their ideas and inventions. For PV here, it looks like their patents were valid, and infringed, just not quite important enough to merit the financial result needed.

Second, it's important to not give Qualcomm a pass here, they are the heavyweight in their realm, and I would not find it at all unlikely that they looked at the ParkerVision technology, thought some of it might be useful, and then set off to develop a work-around the patents.

There's nothing wrong with that. Patents are publicly disclosed. Anybody is free to learn from them and develop work-around products that accomplish the same thing a different way.

Correct. To clarify, there is absolutely nothing wrong with trying to work-around a patent; that's entirely a part of the spurring innovation aspect of the patent system, forcing people to find a different way to accomplish the goal.

How successful one is at actually working around the patent is another question, and how broadly the patent covers the invention (i.e. does it cover all currently conceivable embodiments?), are the questions to ask of the work-around. In this case, (if Q was in fact working-around the PV patents), the jury decided the changes weren't enough, but also weren't willfully trying to copy what the patents claim.

My feeling of not giving Q a free pass is just based on suspicion / standard practice of big companies muscling out small companies, extending and implementing the small company idea with the infrastructure of the large company. In such cases, patents are exactly what small companies rely on to protect the application of their ideas and inventions. For PV here, it looks like their patents were valid, and infringed, just not quite important enough to merit the financial result needed.

It's worth pointing out that the jury award would be plenty to keep ParkerVision in business and would be considered a great success had they not squandered their money on unproductive activities.

True ParkerVision is not a patent troll any more than ARM is. They are research companies that do development part way.

ARM successfully hands off production to other companies. ParkerVision fails in this.

If they could be faulted for anything it might be not promoting and marketing their inventions. But it sounds like that was due to poor management, poor marketing and poor salesmanship

If someone accidentally repeats your R&D, that is an expensive mistake. So ParkerVision doesn't get its royalties up front and on time (lossing the profits it could have made investing the royalties all that time), the other company wastes huge sums on R&D, and a big slice of ParkerVision's profits gets wasted on lawyers (instead of wasted on salepeople).

I think the settlement ParkerVision got sounds fair under the circumstances.

"True ParkerVision is not a patent troll any more than ARM is. They are research companies that do development part way.ARM successfully hands off production to other companies. ParkerVision fails in this.If they could be faulted for anything it might be not promoting and marketing their inventions. But it sounds like that was due to poor management, poor marketing and poor salesmanship"

If they (ParkerVision) could be faulted for anything it might be not promoting and marketing their inventions.

Second, it's important to not give Qualcomm a pass here, they are the heavyweight in their realm, and I would not find it at all unlikely that they looked at the ParkerVision technology, thought some of it might be useful, and then set off to develop a work-around the patents.

There's nothing wrong with that. Patents are publicly disclosed. Anybody is free to learn from them and develop work-around products that accomplish the same thing a different way.

Correct. To clarify, there is absolutely nothing wrong with trying to work-around a patent; that's entirely a part of the spurring innovation aspect of the patent system, forcing people to find a different way to accomplish the goal.

How successful one is at actually working around the patent is another question, and how broadly the patent covers the invention (i.e. does it cover all currently conceivable embodiments?), are the questions to ask of the work-around. In this case, (if Q was in fact working-around the PV patents), the jury decided the changes weren't enough, but also weren't willfully trying to copy what the patents claim.

My feeling of not giving Q a free pass is just based on suspicion / standard practice of big companies muscling out small companies, extending and implementing the small company idea with the infrastructure of the large company. In such cases, patents are exactly what small companies rely on to protect the application of their ideas and inventions. For PV here, it looks like their patents were valid, and infringed, just not quite important enough to merit the financial result needed.

It's worth pointing out that the jury award would be plenty to keep ParkerVision in business and would be considered a great success had they not squandered their money on unproductive activities.

I think you have to frame this differently though. The jury verdict only exists because PV litigated the matter. So their activities were productive, $173M worth of productive, which in an ideal world Q would have paid them through a license years ago. If PV were in a position with a steady income stream from said hypothetical license, they wouldn't have had to sue and spend time and money on lawyers, detracting from further technical work. Maybe they even have enough financial and mental wiggle room to really improve the technology. Maybe they fail even worse. But the litigation was productive, just at this point in PV's company lifespan, not productive enough.

Any jury award is only ever an approximation of what "justice" dictates should have happened. Monetary damages are never truly enough to "make one whole", because of the effort and energy spent in the process of extracting that award though the courts.